Maximize Your Earning Potential - Online Prop Firm (2024)

Maximizing earning potential, aka making as much money as possible, is about maximizing the return on your investments. Whether that is the investment of your time and energy working for a company, or your all-encompassing personal investment in the financial markets. You should strive to maximize your earning potential.

A Good Percentage Return?

A good trader might return 50-100% per year on a personal trading account, and that’s impressive, it takes a lot of skill and work to earn this sort of return on investment in the financial markets! Of course, the amount of money that 50-100% return generates is dependent upon the amount of money the trader has to invest in the first place. If they have $100,000+ to invest then they are well positioned to earn a reasonable income from their trading and they have a platform from which they can grow. But what if they don’t have a large sum of money to invest? What if they have the necessary skills to be a profitable trader, but they don’t have the capital?

Often what happens is a trader will have a much smaller amount of money available to invest in their trading, maybe $100-$1000. Whilst it is possible to open a personal trading account with this amount of money, to trade it well, and to achieve very impressive consistent returns, it will take many years of hard work before that investment is likely to start returning any significant sums of money. A 50-100% return in a year is impressive, but on a $100 account, this is only $50-$100 of usable money.

Prop firms enable traders with low starting capital to earn substantial amounts of money

As traders, we are extremely fortunate to live in a time when online prop/funding firms exist. These businesses offer traders an amazing opportunity to make life-changing sums of money with minimal risk, the trader simply pays for an evaluation of their trading, and when they pass the evaluation they are handed a trading account with live or simulated capital that they can trade to earn real profit. From as little as $40-$50 a trader can be evaluated for a $5,000 funded account, for around $500 they can apply for a $100,000 funded account, and for $1000 they could apply for a $200,000 funded account!

Not all prop firms are offering the same value to their traders

If you take some time to research the various prop firms that exist right now you would be forgiven for thinking that they all offer the same opportunity, most of them will have some form of ‘2-step’ evaluation program, and the price point for each level of capital is fairly similar across firms, but dig a little deeper and you’ll find that some firms are offering far more value to their traders than others.

Comparison of Potential Return on Investment at 4 Leading Prop Firms

We have taken a small selection of prop firms to analyze what return on investment a consistently profitable trader could achieve. We decided on the following firms:

• FTMO – The longest-standing online prop firm, having opened its doors to traders back in 2014. They are pricier than their competitors but are seen to be very trustworthy so traders are often keen to start their funded trading journeys here.
• The5ers – The second longest-standing prop firm, The5ers opened its doors to traders in 2016. Funding programs at The5ers are cheaper than the FTMO offerings, and The5ers are every bit as trustworthy as FTMO… Perhaps even more so. The5ers is the only firm in this list that states that their traders are trading real capital, and their management team is very open and active on social media platforms.
• The Funded Trader – A very popular firm with a gamified platform.
• Funding Traders – A quickly growing firm that appears to be doing and saying all of the right things. Their CEO is very active in their community and on social media, and this is helping them grow and quickly gain trust within the industry.

To conduct our research we decided to use the ever-popular 2-step evaluation program that each company provides. They’re very similar programs with similar price points, and most traders reading this will be familiar with the 2 step evaluation model.

Prop Firm Programs

To calculate the potential return on investment with each firm we used the following parameters:

• $100K Evaluation
  • FTMO ‘Standard’
  • The5ers ‘High Stakes’
  • The Funded Trader ‘Royal Challenge’
  • Funding Traders ‘2 step’
• We assume that the trader:
  • Will not reach the daily or maximum drawdown limits
  • Risks 1% of their trading capital on every trade
  • Averages 2R (2%) per week profit
  • Trades consistently for one full year

**** Of course these numbers may not be realistic for you, this is simply a set of parameters we have decided to use for this comparison

Comparison Results

The table below shows the scale-ups and payouts that a trader could achieve with each firm across 52 weeks of consistent trading:

As you can see, The5ers have annihilated the competition in this comparison, and it’s not at all close. The5ers are offering almost twice as much value to their traders as any other firm in this comparison, with a 393x ROI vs a 219x ROI from The Funded Trader.

1. The5ers = 393x
2. The Funded Trader = 219x
3. Funding Traders = 172x
4. FTMO = 162x

Stop and think about this for a moment. If you were to deposit $500 into a personal trading account and trade it for 12 months you would be doing extremely well to finish the year with a $500 profit. That’s a 1x ROI or a $1 return for every $1 invested… If you were to invest $495 into an evaluation with The5ers and achieve the same performance across a year you could earn $194,375, a $393 return for every $1 invested. That is huge.

The scaling plan makes all the difference

The difference is in the scaling plan. At The5ers they will scale your account up every time you make 10% profit and complete 3 profitable trading days. So it is possible to scale the account up very quickly.

The other three firms all have very similar scaling plans which produce significantly slower growth than is available at The5ers. FTMO will review an account for scale-up after 4 months and in that period the trader should have made at least 10% profit and been paid out at least two times. Both The Funded Trader and Funding Traders will review an account for scale-up after 3 months. But they both require the trader to have been profitable for 2 of those 3 months.

For our comparison, we have assumed that the trader will fulfill the scale-up requirements every time. However, in the case of The Funded Trader and Funding Traders this is quite difficult to do and so in the majority of cases the return on investment gap between them and The5ers would be even bigger.

So, to maximize your return on investment in the financial markets, choose an online prop firm. And when you do, be sure to choose wisely.

We hope you found this comparison useful. Please let us know if you’d like us to do an return on investment comparison of any other firms and/or funding programs.

You may also be interested in our article, 5 Best Strategies For Prop Firm Trading.

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